Understanding e-commerce

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Electronic commerce or e-commerce as it is commonly known is the industry of buying and selling of products and services online. As consumer-buying behavior changes with communities moving online, the question on the minds of many traditional retailers, entrepreneurs, and business owners, is whether their businesses and products and service offerings are suited for online sales. For small businesses, growth is often achieved through the identification of new markets and the acquisition of new customers. E-commerce is an excellent opportunity for companies to extend their sales reach to a world of new customers in a way that was once unimaginable. Selling your goods online can also be considered a great equalizer, because of its ability to level the playing field against larger competitors.

Although the benefits of e-commerce include a large number of potentials customers and lower company infrastructure costs, many small business owners are hesitant to start selling on the Internet due to a lack of understanding of the landscape and resulting concerns about cost, security, and technology. Here are a few questions to serve as guidelines for success:Is your product easy to understand for your online customers? Remember, shoppers will not be able to touch or try your product. Provide detailed product descriptions and images to increase your sales

Can you sell the product at an acceptable profit margin once you factor in the time and expense of packaging and delivery? If you sell low-ticket items, you may need to sell in bulk to increase profits. If you sell perishable items, you will need fast delivery and adequate packaging. Do you sell a service that can be delivered effectively via email? Many information or service suppliers have made seamless transitions to the Internet, for example, converting magazines to digital editions. Does your product appeal to customers outside of your geographic area, or will selling online enhance your service to your existing customers? For example, if you’re selling tickets to a local sporting event, someone who’s several thousand miles away probably isn’t going to be interested. However, that doesn’t mean your neighbors won’t appreciate the added convenience.

Has your business switched to e-commerce?

 

Post By: SimplyBiz

 

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44 comments
  • It’s not easy to launch an e-commerce business. Because of this competition within the market comes mainly from existing businesses launching online components and not from new “pure-play” e-commerce businesses. This is largely due to a lack of venture capital in the space – a significant amount of capital is required to launch an e-commerce business and investors remain wary. @trainers@netactive.co.za
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  • Have a look at https://elev.io/ for self-service support. For live chat there is https://www.intercom.com/ and https://www.drift.com/. For help desk software that has self-service functions try https://www.desk.com/ https://www.freshdesk.com/ and https://www.zendesk.com/.
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  • That's a great question I would like to add this to my website and would love to know how to go about it and if it is effective! What else can be done to improve the user experience for an online store?
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  • Focus 80% of effort on your best products According toPareto’s Law it’s likely that80% of your profits are derived from 20% of products. By focusing on the small number of products that disproportionately contribute towards your website’s success you can achieve exponential growth.
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  • Tasty Chef I think this raises the whole question of price & how we differentiate ourselves online. I can compare prices & delivery times on my phone within minutes. Before the proverbial fick of the thumb - how do we get the customer to stay on our page and buy our product?
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  • After signing up with one of the live chat platforms you are given some code to install on your website. There is some configuration but it is not very advanced. Each of your agents are logged in to the chat system either via a browser or desktop software or an app on their phones. When a customer is browsing your site and engages with the chat window the agents are alerted and one of them picks up the call. The agent is usually told which part of the customer is on and some other information and they then chat back and forth with the customer. One agent can handle multiple chats at a time. Some systems also provide pro-active chat where a customer is alerted to the chat window based on certain rules that you set up. For example if they have looked at your product page and are now on the pricing page their chat window would flash and they would be invited to start a chat. This is the equivalent of a salesperson walking over to a customer in the store who is looking particularly interested in a product.
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  • I like this a lot from VentureBurn: Billions of people use search engines every day to find products that they want to buy. With a physical store it is very difficult to reach such a large market. However an online store can easily accomplish this. By having an online store a business can reach many more customers than it would with physical stores. According to studies most people click only on the links that appear on the first page of search engine results. They never go to the second or third page. As such it is very important to ensure that your ecommerce site shows up on the first page of results. This can be accomplished by performing an activity known as Search Engine Optimisation (SEO) on the ecommerce site. This activity helps your online store to be more visible to the programs that find results for those who search for things in the search engines.
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  • A mobile strategy is crucial particularly in South Africa where mobile penetration and use is one of the highest in the world. However the conversion rate (the percentage of “browsers” who checkout and become “customers”) is much lower on mobile than on desktop. When you’re browsing on your phone when standing in the queue at the supermarket or waiting for a taxi you are much less likely to start entering credit card details and a delivery address. Companies need to find ways to capture some details of those casual mobile browsers in order to follow up later through other channels more conducive to transactions.
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  • E-Commerce is the way of the future - but NOT for all businesses. Does your product transport easily and cheaply? South Africa is a tough market in terms of delivery costs because postal id generally not a viable option. Can your profit margin absorb the high delivery costs of a courier?
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  • Thanks andrewctn I will go and check those out!
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  • @SayoF your are right. Authenticity is key and ensuring that the connection made with the consumer is genuine.
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  • Agree Tasty Chef - the mobile phone is the new shop. Hence we need to make sure everything we do is mobile-friendly. We initially battled with some technology that worked perfectly on a p.c. but not a phone.
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  • @TheTastyChef I'm not actually suggesting that you add delivery charges to the price of the product. My point was more that a R100 product sold in a physical store has to have 10% to 20% allocated to cover rent and therefore the same product sold online for R100 should have some margin available for delivery without increasing the cost or charging delivery every time. It's hard to give an exact percentage for delivery because it's usually dependent on basket size. All courier companies have a basic fixed cost (R40 to R80?) and then charge extra for bigger size and weight. If you are selling cheaper items in small baskets then that basic delivery charge will be a bigger percentage. That is why many stores charge for delivery under a certain basket value to incentivise customers to make a bigger checkout.
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  • The main trends I am seeing in online buying are growth in mobile spend due to increased mobile penetration in the country and an increase in cross border shopping as consumers are looking for a larger variety of products at a better price.
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